A decision by Brazil’s Chamber of Foreign Trade (CAMEX) on whether to impose tariffs on U.S. ethanol has been postponed by until next month for further evaluation. Brazilian sugarcane and ethanol producer associations proposed to reinstate the ethanol import tariff in Brazil after a recent surge in shipments coming in from the United States. UNICA has proposed a 16% tariff on imported ethanol while other producer groups have requested a return to the 20% duty that was discontinued in 2010.
“This is a critically important issue that will impact Brazilian consumers and commodity markets across the globe. It demands very thoughtful consideration,” said the Renewable Fuels Association (RFA), Growth Energy and the U.S. Grains Council in a joint statement. “We strongly believe that re-imposing an import tariff on U.S. ethanol would only lead to increased fuel prices, and endanger the positive and hard-won cooperative trade relationship between our two countries concerning the production, use and global trade in ethanol.”
Brazil was the top destination for U.S. ethanol in March, according to RFA, with nearly 30% of total market share. However, shipments to Brazil were down 28% from February’s record. U.S. ethanol producers have already shipped a total of 146.4 mg to Brazil in the first quarter of 2017, meaning the country has accounted for almost 40% of total year-to-date exports.
RFA president and CEO Bob Dinneen says they are concerned that Brazil is even considering this as an option. “It would be a step backwards for Brazilian consumers who would see higher prices at the pump because some sugarcane producers want to maximize profitability and keep out competition,” said Dinneen. “And it stands in stark contrast to decades of rhetoric from Brazil about the need for free trade when it comes to biofuels.”
Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on Brazil considering ethanol tariffs